People Don’t Like Buying Depreciating Assets
A report from CNBC. ” A decade ago, the U.S. housing market swelled to a bubble of epic proportions. When the bubble burst, millions lost their homes and their savings. Home prices dropped for six years, finally hitting bottom in 2012; today, home prices are about 1 percent shy of that 2006 bubble peak. The difference today from a decade ago is that these prices are not being driven by faulty mortgage products that people can’t afford. They are being driven by a severe lack of supply of homes for sale, as well as near record low mortgage rates. The concern, however, is if those rates start to move up. Then affordability would weaken and home prices could move lower. Also, low rates may make homes affordable, but a sizable number of potential buyers still can’t qualify for those low rates and/or cannot meet the down payment requirements. As home prices rise, so too does the down payment.”
“‘It’s the credit box. There are a lot of people that cannot qualify because they don’t have the credit or the equity,’ said Ben Graboske, senior vice president of data and analytics for Black Knight, adding, ‘A portion is not buying because housing had a reputation for depreciating for five years, and people don’t like buying depreciating assets.’”
The Redding Record Searchlight in California. “Home sales in July in Shasta County and the rest of California took a step back. There were 267 sales in Shasta County last month, a 7 percent drop from the 287 closed escrows in July 2015 and down from 306 sales in June, the Shasta Association of Realtors reported. The median sales price in Shasta Cousnty also fell in July from $243,000 in June to $229,450. Homes sold for a median price of $233,000 in July 2015, according to the California Association of Realtors.”
“Meanwhile, the Federal Housing Finance Agency House Price Index shows values in Redding have gone up 32.38 percent since the second quarter of 2011, the index said. Andrew Leventis, FHFA’s supervisory economist, said there is evidence that a slowdown is ahead. ‘The source of the slowdown is significantly diminished affordability of homes,’ Leventis said. ‘Nationwide, prices are almost 30 percent above where they were five years ago. Household incomes have not increased anything close to that pace.’”
The Post & Courier in South Carolina. ” Oceanside mansions, beach cottages and country houses encircled by creeks epitomize Lowcounty real estate, yet they’ve been hard to find for sale as owners wait for the market to fully recover from the late 2000s housing slide. Those heady days are returning, local Realtors say. ‘There’s a lot of inventory in my opinion,’ says Dawn Marquez, agent with Charleston Home Properties. She’s listing a bungalow on a wooded Isle of Palms street for $675,000. ‘There’s competition, at least in the price range in which this home is in, $500,000-$700,000,’ she says.”
“The house on 20th Avenue near Palm Boulevard ‘is a second home.’ While listings are picking up, ‘There’s not as many eyes on (vacation houses),’ she says.”
KHOU In Texas. “Tim Surratt is a real estate expert with 35 years’ experience—and in that time, he’s seen bull and bear markets. Right now, Houston Association of Realtors (HAR) says home sales are down nearly 9 percent. Katy Southwest, Memorial Park and the Energy Corridor homes are selling less homes for less money, and homes are sitting on the market longer. ‘They were building houses that were in the pipeline and they couldn’t stop building them right away, so builders are going to keep building so that puts a little pressure on the resale market,’ Surratt said.”
“People trying to buy in these areas will save thousands of dollars—turning their financial gain into a burden for sellers forced to reduce their asking price. ‘If you don’t need to sell right now, don’t put it on the market. Let’s wait and see how the spring market comes and what happens then,’ Surratt said. ‘If you’re just putting it on the market to test the waters, this probably isn’t the time to do that.’”
From Western Slope Now in Colorado. “For four years, foreclosures in Mesa County have been driving down, but 2016 has taken some by surprise. ‘I looked at it and made a guess that we’d be on the track back down but to my surprise and a few others, it’s tracking up a little bit.’ said Robert bray, CEO of Bray and Companies.”
“Just one month into the third quarter, county officials say they’ve seen enough to call how this year will end. Foreclosure filings are up 17% and sales of foreclosed home are up 20%. Officials say layoffs in industries the area rely on have slowed the recovery as well. ‘There’s some lay offs in the Fall of 2015 in the Oil and Gas Industry. Usually, a few months after a big layoff like that we’ll see a big increase in foreclosures and we did see that in early 2016,’ said Mike Moran, the Public trustee for Mesa County.”
WAMU on Washington DC. “A Virginia developer planned to turn the six properties into luxury housing and sell them for top dollar. Instead, the D.C. government has taken the six homes in some of the city’s hottest neighborhoods — and plans to use them for affordable housing. Late last month, D.C. Attorney General Karl Racine claimed eminent domain and took six rowhomes owned by Virginia developer Insun Hofgard, who earlier this summer agreed to pay $1.3 million in restitution to buyers of close to two-dozen of her renovated properties — many of which were marked by shoddy work and violations of the city’s construction code.”
“Starting around 2012, Hofgard bought up rowhouses in revitalizing neighborhoods, renovated them and sold them at a healthy profit. But what many of her buyers did not realize was that much of the work was done without permits and by unlicensed crews, leaving them with tens of thousands of dollars in repairs. The six homes DHCD is getting through eminent domain have largely been sitting unfinished and empty since last year when she was sued. At least four were popped up, with a new floor added on top of the existing house. Hofgard would often added a story to rowhouses and convert them into multi-unit condo buildings, with each individual unit often selling for more than she bought the whole house for.”
‘Virginia developer Insun Hofgard, who earlier this summer agreed to pay $1.3 million in restitution to buyers of close to two-dozen of her renovated properties — many of which were marked by shoddy work and violations of the city’s construction code. Hofgard would often added a story to rowhouses and convert them into multi-unit condo buildings, with each individual unit often selling for more than she bought the whole house for.’
But there’s no fraud in this housing market.
The CNBC article headline is ‘We’re in a new housing bubble. Why it’s less scary this time.’
From the CNBC article:
“The difference today from a decade ago is that these prices are not being driven by faulty mortgage products that people can’t afford. They are being driven by a severe lack of supply of homes for sale, as well as near record low mortgage rates.”
How much of the perceived supply shortage is due to get-rich-quick investors who will dump at the first sign of price declines?
‘values in Redding have gone up 32.38 percent since the second quarter of 2011, the index said. Andrew Leventis, FHFA’s supervisory economist, said there is evidence that a slowdown is ahead. ‘The source of the slowdown is significantly diminished affordability of homes,’ Leventis said. ‘Nationwide, prices are almost 30 percent above where they were five years ago. Household incomes have not increased anything close to that pace.’
’since the second quarter of 2011′
It’s amazing how often this time period comes up. Sometimes it’s a little earlier or later. Right around it, I started to find articles with love letters to sellers in Huntington Beach and a Chinese guy in Vancouver running out and buying a condo after reading about it one morning. (Those two articles came out in one week). I always thought it odd that we suddenly had a shortage of housing in every nook and cranny of the country, at the same time. Just like that.
“I always thought it odd that we suddenly had a shortage of housing in every nook and cranny of the country, at the same time.”
Remember Stein’s Law:
One theory: The perceived inventory shortage is just another version of Yellen bucks looking for a place to die.
It will stop, but before that happens, imagine what asset prices will look like with NIRP! This is so exciting. We’re all going to be rich, right?
Initially, stocks and housing, for people who could afford them, were supposed to replace wages. Now the intent is for those assets to replace savings.
I’ve read that the Maya responded to adverse events by sacrificing more people. Figuratively speaking, that appears to be our plan too.
I think PB has got it. It’s an effect of too much money in the system which distorts normal markets.
It’s the same reason why DotCom 2.0 exists - too many dollars looking for a home.
Too many pension plans and insurance companies chasing yield.
Was talking to a teacher not too long ago who was very bullish on his PERA (Colorado) pension. I told him it was under funded. He said that it had 8% yields, so all was good. I asked him if he had already forgotten the years (not so long ago) when it lost money, and that it was still underfunded.
He wouldn’t hear of it. As far as he was concerned PERA was doing great and his retirement was in the bag. No 50 cents on the dollar payouts were in store.
I wonder what tune he’ll be singing when the markets crash and PERA’s assets collapse? Last I heard PERA would be unable to make full payouts by 2025, even with 8% yields.
And there won’t be any taxpayer funded bail outs. TABOR will make sure of that.
It might not really make sense to call it a bailout if the taxpayers have to pay more tax to fund an obligation.
Snake charmer - what a great comment. The Maya part, and housing replacing savings now instead of replacing wages. Now that you say it, it makes so much sense.
We could go further. Housing has replaced employment - so many people have gotten into the realtor and/or flipping game as their “career.” And for the elderly, housing has substituted for pensions and insurance (ie a reverse mortgage to pay for long-term care/nursing homes where cost has no relation to the money retirees earned over their lifetime).
From this point of view, housing is not just one more symptom of a global credit bubble, but is its very foundation, the only thing that makes these post-capitalist trends (stagnant wages, no savings, fewer jobs, soaring costs) even remotely sustainable for the masses.
So either the housing bubble is equal among many results of an easy money credit bubble, or (in the absence of wide stock ownership), it is the credit bubble’s fundamental enabler, not a consequence but a crucial pre-condition.
Interesting, very interesting. Thanks for the thought of the day.
I’ve read that the Maya responded to adverse events by sacrificing more people. Figuratively speaking, that appears to be our plan too.
Actually, that reminds me of people who say that the Fed shouldn’t try to prevent recessions because there are many wonderful benefits that come from recessions.
I find it a bit irksome that there are so many dollars looking for a home, but nobody seems to want to put those dollars into raising wages or investing in US-based businesses and infrastructure. If companies want a tax break, why not hire someone and decrease earnings tax purposes? It seems like a back-door way to pay only 6% tax (social security payroll) on revenue. This works especially well for private companies who don’t have stockholders to please.
If companies want a tax break, why not hire someone and decrease earnings tax purposes?
I hope you never run a business. With this logic, you should hire people until your earnings reach zero, so you can get the tax break.
By the way, the opposite is true for many small business (who often times are set up as flow through entities, where income is taxed at personal income tax rates). If taxes go up, we see if we can go more with fewer employees, so we can RAISE our pre-tax income, to make up for high personal tax rates.
uh huh 56% tax on last dollar earned… we peons pay a buck for a Hershey bar, he pays a buck-fifty.
“I think PB has got it. It’s an effect of too much money in the system which distorts normal markets.”
Just repackaging Milton Friedman:
Multi-family “condos” was a new concept to me when I moved to Mass. I kept thinking, “wow those houses look huge”. Only to realize the reason there was 4 cars in the driveway was because that 3000 sq ft 150 yr old house was converted into “apartments”. My town is crawling with that style of “condo”. I guess then the landlord can get away with HoA fees to cut the grass and pay for a security system, ha!
And they go on and about the “wealth” up here in New England as people live in rotting houses somehow worth $500,000. Sorry I’m just used to living in brand new digs under $200k in the “poor” South.
‘Just one month into the third quarter, county officials say they’ve seen enough to call how this year will end. Foreclosure filings are up 17% and sales of foreclosed home are up 20%. Officials say layoffs in industries the area rely on have slowed the recovery as well. ‘There’s some lay offs in the Fall of 2015 in the Oil and Gas Industry. Usually, a few months after a big layoff like that we’ll see a big increase in foreclosures and we did see that in early 2016,’ said Mike Moran, the Public trustee for Mesa County.’
Remember the poster saying “those loans will probably be OK”?
You talkin’ to me?
I have made posts like that, but usually I add a caveat like “those loans will probably be OK as long as everyone keeps their jobs, spouses, and health.” Even in good times, losing any one of those can cause a foreclosure.
These days, I admit the effect is much worse because many of the loans are granted with a low down payment, so the FB gets stuck with a job loss and can’t sell the house either.
The vast majority of foreclosures were prime loans. The main characteristic was when they were made. Meaning the prevailing prices at the time caused the default. This whole “it was the loans, not the prices” is baloney made up after the fact to justify ridiculous housing prices.
‘as long as everyone keeps their jobs, spouses, and health’
This ignores strategic default. People don’t like to throw good money after bad. What really clobbers the market is when a bunch of people throw in the towel at the same time.
The vast majority of foreclosures were prime loans….Meaning the prevailing prices at the time caused the default.
Yeah yeah, I know the drill…
————
Comment by oxide
2016-08-06 17:07:18
Prime refers to a FICO score. It does NOT indiciate to whether the loan required full PITI on Day 1. Back in 2006, I could have had a $100K job and an 850 FICO, the very definition of Prime. But if I bought an $800K house using an I/O loan with a three-year grace period, then I am probably going to foreclose during Year 4. THOSE are the “primes” who defaulted — highly paid idiots on an ego trip, basically. Who are the Primes who are defaulting now? HARPs and HELOCs? Still relics of the pre-2009.
————
I still maintain that the problem was the loans. If there had been decent lending standards* in place, there simply wouldn’t BE the loans to buy houses at those prices. If a house is sitting in a forest with a really high price tag but nobody can get a loan to buy it, does the house blow up a housing bubble?
———
*fully amortized PITI Day 1, based on income instead of FICO
and i noticed those little airhead chickypoos and gamer guys selling mortgages at the wells fargo next to my TD brokerage house
that cant be right….and i stumbled upon this blog
The biggest problem was the strategic default. Coming soon theater near you.
and i noticed those little airhead chickypoos and gamer guys selling mortgages at the wells fargo
Were you expecting them to have an MBA in Finance?
They’re sales people. Their job is to prescreen the losers before sending their paperwork to underwriting. It’s always been that way. The only difference is that it used to be a middle aged guy in suit who did that. He was replaced with kids because they’re paid less.
exactly adults who might have some morals left to give you a loan you can afford. not just type in numbers and the computer says you’re approved.
Apartment loans with 20-25% down and minimum coverage ratios of 1.25+ are not the same as 3% FHA loans at 43% of income.
For proof that Boston has become a luxury housing mecca for wealthy people from around the world, look no farther than Downtown Crossing.
At the high-end Millennium Tower, buyers have come from Greece, Hong Kong, and the Middle East, scooping up condos two or three apiece. There’s a real estate executive in San Francisco who markets luxury US properties in Asia, and claims on her website that she’s sold 7 percent of the tower — roughly 30 units.
And then there’s the recent immigrant from China, Bingyi Chen, who lives in a modest townhouse in Concord and has bought at least 16 condos on behalf of investors in his native country, according to property records and his real estate agent. He paid $15.6 million in total. All cash.
http://www.bostonglobe.com/business/2016/08/29/with-millennium-tower-boston-reaches-new-heights-foreign-money-magnet/keC5sjXE546tpvGmGsTVlM/story.html
They like cars,defaults skyrocketing
Hahahaha. Downtown crossing is such a shady area that butts up against Chinatown here in Boston. There’s a huge Macy’s which is home to lots of homeless right outside the doors. Some of the streets are not well lit at night and you tend to look over your shoulder.
As housing reignites, even bust towns are booming again
By Andrea Riquier
Published: Aug 30, 2016 3:39 a.m. ET
The epicenter of ‘drive until you qualify’ has reemerged as a popular housing destination
Maybe not “best,” but Fresno was ranked 17 in terms of “hot” housing markets.
The poster children of the housing bust are back.
Last week, Realtor.com released its August “Hotness Index,” ranking metro areas on how many days a listing in that area stays on the market, as well as how many web page views it receives.
(News Corp, which owns MarketWatch, publisher of this article, also owns Realtor.com, the listing website of the National Association of Realtors.)
Studding August’s top ten are names familiar from the housing bubble and the municipal distress that resulted when it burst: Vallejo and Stockton, two California cities that filed for Chapter 9 bankruptcy, as well as Modesto, Sacramento, and Fresno, which had hard times of their own.
…
Fresno? I have stopped at a couple gas stations before driving through.
It seems like this is a big farm town.
Drive until you qualify!
A big farm town with a terrifying urban core.
some of the dirtiest air in the country too. (Bakersfield).
The Bakersfield, Calif., resident had valley fever, a lung infection brought on by inhaling a microscopic fungus called Coccidioides. Like most people with valley fever, Rountree, 62, has no idea where he inhaled the fungus.
“It seems like this is a big farm town.”
I’ve always viewed Denver this way.
Actually, Denver was a lot nicer when it really was a big farm town.
I’m more familiar with Lakewood, and that goes back twenty years when there was open-space everywhere.
My home town. Lots of bad air. You don’t want to spend anymore than two decades there. Bad for your health. If you are lucky your worst affliction will be asthma.
Drive until you qualify!
From where? Is Fresno even remotely close to any metro area?
In the 2005/2006 period I read of people commuting from Fresno to San Jose for their jobs. It’s a killer drive.
When places like Fresno, Victorville, Lancaster, Ridgecrest, Stockton are bubbly, that is the top of the RE bubble and it will crash.
It’s the top of the RE bubble. It will crash.
HOUSES , AUTOS AND RETAIL B@TCHEZ!
Houses have carrying costs. A certain number of investors got in (again) during the recent run-up. When house prices flatten, they’ll try to get out. What happens then?
Housing today has some similarities to the art market - well suited to the big, cash-rich, nimble players, who can buy and sell houses quickly, with the smaller players in tow, trying to ride the wake.
On DC news radio the other day, during one news segment on housing, I heard a real estate analyst say that one of the causes of the tight inventory was investors buying up housings during the past several years, and that selling those houses would increase inventory.
“I heard a real estate analyst say that one of the causes of the tight inventory was investors buying up housings during the past several years, and that selling those houses would increase inventory.”
The best predictions are those which predict events already occurring, though not widely known. Have you seen any of the recent Vancouver threads?
“Housing today has some similarities to the art market - well suited to the big, cash-rich, nimble players, who can buy and sell houses quickly, with the smaller players in tow, trying to ride the wake.”
Real investors usually own their primary residence; keeps the bird happy. Small players trying to make a profit on the spread between borrowing and the flip usually discover that the low hanging fruit typically involves some skilled work.
1. The numbers aren’t that big relative to the whole market;
2. When you kick out a renter, and then sell the house, you aren’t adding supply. It’s a game of musical chairs.
The best measure of supply relative to demand is the national vacancy rate, and that is not showing oversupply.
That’s true, but… perhaps the vacancy rate must also be viewed in context of a historically high number of vacant units.
Houses do have carrying costs, even without mortgages, and I suspect a decent number of those vacant units would be sold when owners deem it a profitable time to do so.
Your number is a fact. However, you need to consider:
1. The base of total housing units has been growing, so the nominal number of housing units represents as smaller and smaller share of the total. The low going back to 1965 is about 8.3%, the high about 14.6%, and the number today is 12.7%.
Also, some of the “vacant” units will never be available for occupancy.
2. Vacation homes, resort area homes that are not occupied year round and timeshares fall into this category…with aging demographics there will be more and more of these units; and
3. Homes that are in disrepair and uninhabitable also fall into this category. Given the current age of the housing stock, a greater and greater share of our housing will end up in this category as well. In 2013, HALF of all housing units were over 37 years old. 40% of housing units in existence in 2013 were built before 1969.
I’m certain there are people who own vacant housing that are not using it enough to keep it indefinitely. HOWEVER, I don’t think their trigger to sell will be when it is profitable to do so. I think the more likely trigger is that they fear the value will fall (or has started falling).
What is the income to debt service limit these days for Fannie/Freddie/FHA?
I read somewhere that it was something like 43 percent. It was once 25 percent, and 30 percent for all debt.
Increasing that limit just pushes up prices for sellers, to the perpetual detriment of buyers. With Fannie and Freddie nationalized, what they do is government policy.
I’d set it at 15 to 25 percent depending on how much work the house needs, with additional borrowing for repairs and reinvestment. Would that mean younger generations could not buy? No! It would mean they would pay less.
The amount of government backed loans went from something like a quarter or third in the mid-1980’s to over 90% now. Why not let the market set the loan limits? We are treated to headlines like “It’s a bubble but it’s less scary!” at the same time the borrowers get interest rates suggesting there’s no risk at all.
“Why not let the market set the loan limits?”
If the market were allowed to set the loan limits, how would the government be able to keep housing affordable?
“A bridge that relies on wealth effects, you better hope that you got enough growth to justify the asset price increase which created the wealth effect in the first place.” - Raghuram Rajan
“Central banks can only do one thing, and that’s provide monetary welfare for the wealthy. Now that the central bank has enriched the obscenely wealthy, distorted markets globally and addicted the economy to cheap credit, the servile toadies and lackeys in the mainstream media and the Cargo Cult of economic “professionals” is finally admitting that it was all a fraud, a racket that favored the rich.”
http://www.zerohedge.com/news/2016-08-30/centrals-banks-welfare-wealthy
That’s a legit question, P-Bear. If you let The Market set loan limits, then only the upper class or rich would be able to buy houses. The middle class and poor would be stuck paying rent for life, and have nothing for the kids to live in. Yes, I know HBB loves rent for life and posting articles of rents decreasing, but 5-10 years, rent goes up.
‘If you let The Market set loan limits, then only the upper class or rich would be able to buy houses’
How then do you explain loanership rates being at a 55 year low? When the market set rates, prices were much lower and loanership (and ownership) were far higher. Back then we paid off our houses in 15 years. Golly those were the bad old days, huh?
Here comes the lecture on Oxidenomics…
Fannie Mae’s DTI is 36% or 45%, depending on your credit score:
https://www.fanniemae.com/content/eligibility_information/eligibility-matrix.pdf
And Ben, we were talking about allowing the market to set DTI, not mortgage interest rates. If you want the market to set mortgage rates, I can’t help you there. You’ll have to call up Janet Yellen.
That’s a legit question, P-Bear. If you let The Market set loan limits, then only the upper class or rich would be able to buy houses. The middle class and poor would be stuck paying rent for life, and have nothing for the kids to live in. Yes, I know HBB loves rent for life and posting articles of rents decreasing, but 5-10 years, rent goes up.
How do you explain foreign countries that don’t have Fannie/Freddie or equivalents, but have high ownership rates?
I just read something the other day that the HUD Dept had something like $40 billion in incorrect/bad records and paperwork.
They must be purchasing loads of white out and the scanners are working overtime.
I smell fear…is that you, Canadian FBs?
http://wolfstreet.com/2016/08/29/fear-of-housing-crash-of-canada-housing-bubble/
It’s truly amazing how quickly irrational exuberance can morph into outright panic.
‘This summer, famed short seller Marc Cohodes came out of retirement and jumped into ring with a number of interviews on TV and in the print media, and this too rattled some nerves – largely because it hit home.’
“I think it’s a money laundering-induced market,” he said as we reported at the time. “Where the local politicians, or the BC Liberals, are kept or in cahoots with the real estate brokers, developers, lawyers, that angle. And they have sought Chinese money to keep the market propped up and it won’t last,” he said. “China has capital controls on, and Vancouver has become the money laundering mecca of either the world or North America, and something is going to change and change drastically.”
Mortgages fall to 18-month low in the UK.
http://www.telegraph.co.uk/business/2016/08/30/ftse-100-inches-higher-amid-doubts-fed-will-hike-rates-next-mont/
End the Fed.
http://charleshughsmith.blogspot.com/2016/08/central-banks-welfare-for-wealthy.html
Yellen’s flying monkeys continue their incessant jawboning about a mythical rate hike.
http://www.zerohedge.com/news/2016-08-30/feds-fischer-speaks-says-rate-decision-not-one-and-done-he-takes-markets-account
How long can people believe this bs?
What is the purpose of the constant jawboning about a .25% rate hike?
I think it is to prevent speculators from going after the dollar.
Does anyone else have any idea what is up with this constant threat of a rate hike? Hasn’t it been like 3-4 years of crying wolf?
If the Fed can raise the rates .25%, it means that the economy is strong enough to absorb that cost and the Fed is doing its job well enough that it can “normalizing” rates. It’s like a salesperson saying “I’m gonna make my quota this month!”
I agree it’s jawboning. While a rate hike would mean things were looking up and that the War on Savers was coming to an end, NIRP is casting an ominous shadow over everything.
I have no idea which way things will play out. I don’t think the Fed does either. It’s best to hedge all bets.
How long can people believe this bs?
Considering that 95% of the electorate are functional retards, they’ll swallow this BS into perpetuity.
‘According to a think tank that does contract work for NATO and the Israeli government, the West should not destroy ISIS, the fascist Islamist extremist group that is committing genocide and ethnically cleansing minority groups in Syria and Iraq. Why? The so-called Islamic State “can be a useful tool in undermining” Iran, Hezbollah, Syria and Russia, argues the think tank’s director.’
“The continuing existence of IS serves a strategic purpose,” wrote Efraim Inbar in “The Destruction of Islamic State Is a Strategic Mistake,” a paper published on Aug. 2.’
‘By cooperating with Russia to fight the genocidal extremist group, the United States is committing a “strategic folly” that will “enhance the power of the Moscow-Tehran-Damascus axis,” Inbar argued, implying that Russia, Iran and Syria are forming a strategic alliance to dominate the Middle East.’
“The West should seek the further weakening of Islamic State, but not its destruction,” he added. “A weak IS is, counterintuitively, preferable to a destroyed IS.”
‘Inbar, an influential Israeli scholar, is the director of the Begin-Sadat Center for Strategic Studies, a think tank that says its mission is to advance “a realist, conservative, and Zionist agenda in the search for security and peace for Israel.”
‘The think tank, known by its acronym BESA, is affiliated with Israel’s Bar Ilan University and has been supported by the Israeli government, the NATO Mediterranean Initiative, the U.S. embassy in Israel and the Carnegie Council for Ethics in International Affairs.’
‘BESA also says it “conducts specialized research on contract to the Israeli foreign affairs and defense establishment, and for NATO.” In his paper, Inbar suggested that it would be a good idea to prolong the war in Syria, which has destroyed the country, killing hundreds of thousands of people and displacing more than half the population.’
‘As for the argument that defeating ISIS would make the Middle East more stable, Inbar maintained: “Stability is not a value in and of itself. It is desirable only if it serves our interests.”
“Allowing bad guys to kill bad guys sounds very cynical, but it is useful and even moral to do so if it keeps the bad guys busy and less able to harm the good guys,” Inbar explained.’
We have always been at war with Oceana….
What exactly is it that the apartheid nation of Israel has that the United States wants or needs?
What exactly is the net benefit to the United States from supporting this terrorist regime?
Why is American foreign policy determined by voter demographic that believes in the Rapture?
P.S. Drudge and Breitbart aren’t libertarians, they’re neocons.
I wish Weld or someone w a tie and shiny shoes led the ticket
Aid to Israel is great for the arms manufacturers. The money is spent on tanks, helicopters, missiles, etc. that are made in the USA. There’s also a thriving technology hub around Tel Aviv that benefited from all of the highly educated Russian Jewish scientists and engineers how moved to Israel in the 1990s after the Soviet Union fell apart. Microsoft and Intel both have R & D operations there.
Then there’s this from Noam:
A part of the Nixon Doctrine was that the U.S., of course, has to control Middle-East oil resources — that goes much farther back — but it will do so through local, regional allies, what were called “cops on the beat” by Melvin Laird, Secretary of Defense. So there will be local cops on the beat, which will protect the Arab dictatorships from their own populations or any external threat. And then, of course, “police headquarters” is in Washington. Well, the local cops on the beat at the time were Iran, then under the Shah, a U.S. ally; Turkey; to an extent, Pakistan; and Israel was added to that group. It was another cop on the beat. It was one of the local gendarmes that was sometimes called the periphery strategy: non-Arab states protecting the Arab dictatorships from any threat, primarily the threat of what was called radical nationalism — independent nationalism — meaning taking over the armed resources for their own purposes.
Well, that structure remained through the 1970s. In 1979, Iran was lost because of the overthrow of the Shah and pretty soon the Khomeini dictatorship — clerical dictatorship — and the U.S. once tried to overthrow that and supported Iraq’s invasion of Iran, and so on. But, anyway, that “cop” [Iran] was lost and Israel’s position became even stronger in the structure that remained. Furthermore, by that time, Israel was performing secondary services to the United States elsewhere in the world. It’s worth recalling that especially through the ’80s Congress, under public pressure, was imposing constraints on Reagan’s support for vicious and brutal dictatorships. The governments around the world — say Guatemala — the U.S. could not provide direct aid to Guatemala, because — which was massacring people in some areas in a genocidal fashion up in the highlands — Congress blocked it. Congress was also passing sanctions against aid to South-Africa, which the Reagan administration was strongly supporting South Africa and continued to do so right through the 1980s.
This was under the framework of the war on terror that Reagan had declared. The African National Congress — Mandela’s ANC — was designated as one of the more notorious terrorist groups in the world as late as 1988. [So] that it [could] support South-African apartheid and the Guatemalan murderous dictatorship and other murderous regimes, Reagan needed a kind of network of terrorist states to help out, to evade the congressional and other limitations, and he turned to, at that time, Taiwan, but, in particular, Israel. Britain helped out. And that was another major service. And so it continued.
http://www.alternet.org/story/147865/noam_chomsky%3A_the_real_reasons_the_u.s._enables_israeli_crimes_and_atrocities
Horrifying. I wonder if this think tank was the source of the unfortunate phrase “moderate al-Queda rebels.” It would not surprise me if Mr. Inbar’s mentality has penetrated our own political and military leadership.
The meme being put out there is that Russia and Iran are bigger threats to Americans than radical Islamic extremism, often sponsored by Saudi Arabia and nourished in countries we’ve invaded or bombed.
Ya man, we can bring them into the fold just like our successful treaties/alliances with Al Qaeda and Taliban. That worked out so well. Shoot they probably are taking orders from us since we armed and trained ISIS in Syria/Libya, “rebels” my arse.
Because the war “on terror” is permanent - until the U.S. goes bankrupt and electronically confiscates everyone’s 401ks and IRAs.
If the US goes bankrupt, those 401Ks and IRAs will already be worthless. There won’t be anything to confiscate
Now if you have PMs …
‘According to a think tank that does contract work for NATO and the Israeli government, the West should not destroy ISIS, the fascist Islamist extremist group that is committing genocide and ethnically cleansing minority groups in Syria and Iraq. Why? The so-called Islamic State “can be a useful tool in undermining” Iran, Hezbollah, Syria and Russia, argues the think tank’s director.’
Sounds great, until they start hijacking airliners and flying them into Manhattan skyscrapers.
By that guy’s reasoning, the continued existence of ISIS “can be a useful tool” for orchestrating or justifying changes in our own country as well. Imagine that.
Isn’t that why US and its allies created ISIS in the first place?
“The difference today from a decade ago is that these prices are not being driven by faulty mortgage products that people can’t afford. They are being driven by a severe lack of supply of homes for sale, as well as near record low mortgage rates.”
It is all of the above this time. There are faulty mortgage products out there again, and people are living above their means once again. The whole thing is another house of cards. The lack of supply is artificial. No one can afford to sell their home and buy another overpriced one. End the Fed.
I had a weekend post recently that included an editorial suggesting a “good loan” was one where the asset could be sold to cover what was lent against it. Jingle jumped right in and said such a thing questioned his credibility.
We don’t know where the cracks may be until this thing is tested. What we do know is lending standards have been constantly lowered, for years, as prices have skyrocketed year after year. One could argue it should be the opposite.
A good loan is a loan that is issued and paid as agreed. A loan requiring an asset sale to cover repayment is not defined as a good loan. All of my loans are paid as agreed.
It would be foolish for me to default, since the assets securing the loan are now valued at about twice the loan balance and the rental income is about 135% of the debt service (PITI).
There are two measures of supply:
1. The number of listings available for sale; and
2. The number of homes/apartments in existence.
The first goes up and down, and is of primary concern to those who make their money based on sales volume…the realtors.
The second influences the first (but doesn’t dictate the first), and the best measure of whether we have enough housing in existence relative to demand is the vacancy rate.
It is possible to have an artificial lack of supply as signaled by #1.
However, if #2 is also showing a lack of supply, then perhaps the lack of supply signaled by the number of listings isn’t artificial.
_______________________
Said another way, if you are in a market that truly has limited supply, then people who are moving from one home to another will act quickly when a housing unit becomes available…even to the point of paying double rent for a little while, or having more overlap in ownership than typical. There is a strong aversion to living in one’s car. Days on market fall, the number of listings at any given time are low–because homes don’t stay on the market for long. There is competition for listings, prices rise.
Santa Rosa, CA, has 2 weeks of for-sale inventory, and a rental vacancy rate that is 1% (effectively zero–the 1% is for short length of time between tenants). There is nothing artificial about the housing shortage there.
On the other hand, if there is plenty of excess supply (lots of vacancy), no one is worried about being homeless…they avoid double rent, they time the sale of their home with the purchase of their next very efficiently, etc. Homes stay on the market for longer because people can shop around. There is less competition, so prices don’t rise much.
Supply should never be measured by the number of listings…that is a very superficial measure. Supply should be measured by vacancy rate, which at extremes will influence the number of listings in a meaningful way.
459 SF Homes listed
http://www.realtor.com/realestateandhomes-search/Santa-Rosa_CA
175,000 people live in Santa Rosa.
Per Trulia, there are more than 600 transactions each month.
http://www.trulia.com/real_estate/Santa_Rosa-California/market-trends/
459 isn’t very many in this context.
A good friend purchased a vacant lot in Sedona, AZ for $125,000 in 2003. He turned down $385,000 in 2006. He so loved the red rock views and planned to build a house there. Today in 2016, the property is still vacant as the plans changed (as they so often do). There are many vacant lots available and the value of this lot is around $100,000, though not much is selling.
Second home markets seem to get very bubblicious and take a long time to recover off the bottom and Sedona seems to be a good example. They are building a few new houses there today, but it seems the market is still muted.
Lottery tickets vary rarely come twice.
Especially winning ones.
“He turned down $385,000 in 2006.”
“Nobody ever lost money taking a profit.” —Bernard Baruch
But…but…the NAR said home prices only go up!
http://www.zerohedge.com/news/2016-08-30/us-home-prices-suffer-3rd-monthly-decline-first-time-2012
VIDEO – Bill Clinton: Rebuild Detroit with Syrian Refugees
by Julia Hahn29 Aug 2016Washington D.C.
In a previously little-noticed video from February at the Clinton Global Initiative, former President Bill Clinton suggested that the U.S. use Syrian refugees to rebuild Detroit.
“The truth is that the big loser in this over the long run is going to be Syria. This is an enormous opportunity for Americans,” Bill Clinton said about the Syrian migrant crisis.
Detroit has 10,000 empty, structurally sound houses—10,000. And lot of jobs to be had repairing those houses. Detroit just came out of bankruptcy and the mayor’s trying to do an innovative sort of urban homesteading program there. But it just gives you an example of what could be done. And I think any of us who have ever had any personal experience with either Syrian Americans or Syrian refugees think it’s a pretty good deal.
It is unclear from the video why Clinton seems to think it would be better to fill these Detroit jobs with imported foreign migrants rather than unemployed Americans already living there, who could perhaps benefit from good-paying jobs.
In the video, Clinton discusses the migrant crisis with billionaire and mass migration enthusiast Hamdi Ulukaya of the Chobani yogurt empire.
Ulukaya has become a figure of controversy for his decision to fill his yogurt plants with foreign refugees rather than unemployed Americans. At the World Economic Forum in Davos earlier this year, Ulukaya encouraged other global elites to follow his lead.
The unearthed video seems to underscore Donald Trump’s recent declaration that, “Hillary Clinton would rather provide a job to a refugee from overseas than to give that job to unemployed African-American youth in cities like Detroit who have become refugees in their own country.”
Hillary Clinton has called for a 550 percent expansion to the importation of Syrian refugees. Based on the minimum figures she has put forth thus far, a President Hillary Clinton could potentially import a population of refugees (620,000) that nearly equals the population of Detroit (677,116).
http://www.breitbart.com/2016-presidential-race/2016/08/29/bill-clinton-calls-for-rebuilding-detroit-with-syrian-refugees/ - 79k -
this is the same reason i saw lots of ads on NYC CL and jobs boards for workers to come to new orleans after katrina $12 hr plus fema housing to start..
one requirement must speak Spanish……plus there was NO jobs march, jesse al maxine none of them wanted to even attempt one, because they knew the locals wont show up.
I’ve never understood the American phobia against knowing more than one language. Outside of the UK, most younger Europeans are fluent in at least two languages. At a restaurant in Cesky Krumlow (Czech Republic) our waiter spoke Czech, English and German.
It was also interesting to watch Slavs and Hungarians talk to each other in English in Budapest.
I don’t see it as a phobia, but as a blind spot in our educational doctrine. The science is that languages are much more easily learned when children are very young, but we tend not to introduce foreign languages here until high school or college, if at all. Why is that?
Similar to your experience with the waiter, I have family members who reported that, in the Netherlands, even people working behind the counter at McDonald’s spoke fluent English.
I agree that geographic isolation plays a role, this isn’t Europe, but we could do a lot better.
Our public education system is not intended to produce sharp, self-sufficient young people with critical thinking skills and a range of competencies. Under the NEA Comrades of Proven Worth (D), our “everyone’s a winner!” education system is designed to churn out dumbed-down dolts who will be mindless, compliant sheeple. Mission accomplished.
in the Netherlands, even people working behind the counter at McDonald’s spoke fluent English.
The thing is, everybody who isn’t an English speaker has a natural, obvious second language to learn: English. That makes it possible to talk to anybody. It’s truly becoming a global language. It’s also very easy to watch TV and movies in English anywhere there’s interwebs or cinemas. The resources and the reasons to speak English are orders of magnitude higher than for any other language.
What language should Americans learn? Whatever they choose, they’ll only be able to talk to a very small subset of the world in that language and look like rubes to every other country. Oh, you don’t speak French, German, Spanish, Russian, Swedish, , you must be a snob!
Also, I dispute slightly that kids learn better than adults. The fact is, if you stick an adult in with a baby and give him 24 hour a day instruction, he’ll do pretty good. After 2 years of every waking hour education the adult will speak much better than the 2 year old. The adult would have an accent, but they’d speak just fine. People don’t realize that 4 hours a week studying a language is nothing compared to living and breathing it every waking hour, which is what kids do.
There isn’t a phobia. Many states require 3-4 years of a language to graduate high school, as do many colleges which require 2 years college-level. But at least for Gen Xers, that second language was largely unnecessary. The US (and Canada) are so much bigger than any European country that kids can cover the continent without knowing another language. So, use-it-or-lose-it, and we lost it.
Also note that the major influx of Spanish speakers didn’t arrive until the mid 1990’s, long after GenXers finished school. So most Gen-Xers, not needing to care which language they took, picked the wrong language, like French or Italian. It’s not like Europe where taking English was so obvious as to be required.
That’s changing fast. Round here, parents can send their kids to Spanish immersion day-care, and almost everyone is taking Spanish. I’m not sure it’s to be worldly or educated. They just don’t like illegals talking behind their backs, so the speak.
Yeah, they “teach” it in HS, but it’s at best a half hearted effort, especially in flyover.
Even in SoCal, few “anglos” bother to learn enough Spanish to carry a conversation. And being a Spanish speaker can payoff in SoCal. When at the hotel or a restaurant, I’ll speak to the staff in Spanish, which usually results in a major improvement bump in the quality of service.
One time at LAX I was in line at the car rental counter. The people in front of me were giving the agent a lot of grief over nothing. Once they left I stepped up to the same agent and greeted him in Spanish, and remarked something like “Gee, those guys were jerks”. He treated me like a king. Got me an upgrade, etc.
Also note that the major influx of Spanish speakers didn’t arrive until the mid 1990’s
LOL
Yellowstone NP service employees where from all over the planet. No locals at all. Their name tag states the Eastern Euro country they come from.
Prostitutes around the world speak some English.
Yellowstone NP service employees where from all over the planet. No locals at all. Their name tag states the Eastern Euro country they come from.
I think that there’s some sort of special visa that’s used by those employers to bring in Eastern European students just for the summer. Around 25 years ago I met a bunch of English and Irish students in Boston who working summer jobs there.
good idea, give them Detroit and Baltimore, let them police it with billy clubs.
“Detroit has 10,000 empty, structurally sound houses—10,000. And lot of jobs to be had repairing those houses.”
Willie is missing something.
Jobs for the 10,000 Loan Owners to buy these “structurally sound houses” so they can hire Syrian Tile & Marble along with Refugee Roofing and Remodeling LLC to do the work.
Going a step further, he might want to think about what they are going to do when the 10,000 remodels (a fraction of Hurricane Wilma’s number which kept SE Florida busy for about six months) are done.
They start selling rugs and goat milk to each other. Just like at home.
They’ll join the FSA, and of course not show an iota of gratitude.
Another voice in the wilderness warns of a crash.
http://www.businessinsider.com/ubs-research-note-on-credit-cycle-and-stock-markets-2016-8
Time for the big boys to panic folks so they can make more money on the downside?
More unintended consequences of NIRP, the central banks next escalation in their War on Savers.
http://www.zerohedge.com/news/2016-08-29/safes-sell-out-germany-savers-lose-faith-banks
City by city home price trends.
http://www.marketwatch.com/story/city-by-city-look-at-house-prices-in-june-as-san-franciscos-growth-slows-2016-08-30
Resettling millions of Democrat-on-Arrival refugees from Hillary’s neocon wars…pure diabolical genius from the collectivist kleptocrats. Forward!
http://www.breitbart.com/2016-presidential-race/2016/08/29/bill-clinton-calls-for-rebuilding-detroit-with-syrian-refugees/
Twin Falls, Idaho.
Whiteaho wont take rapeugees. Try FL.
“Whiteaho wont take rapeugees. Try FL.”
We have our refugees bused in from Texas.
I see the loaded southbound Greyhound with Texas plates on I 95 about every 2 weeks.
It takes them about a year to save up enough money to buy a car and a 12 pack so they can hit one of my vehicles.
Who is hiring these illegals? Who rents to them? Your neighbors!
One thing is for sure, my neighbors are not selling them car insurance.
Who chose to live on such a busy road?
Fundamental transformation. To make an omelette, you have to break some eggs.
Question: is there really a ‘lack of housing’ or the banks giving the appearance of a ‘lack of housing’. Looking at Palm Beach County there are currently 761 homes being held by the banks (foreclosures) at what I call inflated prices. This seems to be true throughout the U.S. My question is why are they holding these houses? I guess that 761 may be a ‘drop in the bucket’ but add in the various counties in south Florida and you get into the thousands. During the last ‘burst of the bubble’ banks were unloading at discount prices.
High Times: The Hidden Poverty in Marijuana’s Black Market
In Hayfork, California, marijuana farming has become the new normal.
http://capitalandmain.com/high-times-the-hidden-poverty-in-marijuanas-black-market-0829
‘The Market Is Saturated’: Brooklyn’s Rental Boom May Turn Into a Glut
http://www.nytimes.com/2016/08/30/nyregion/the-market-is-saturated-brooklyns-rental-boom-may-turn-into-a-glut.html
Good for a chuckle. From today’s yahoo report about consumer confidence.
…
“We advise Fed officials to throw their caution to the wind just like the American consumer is.”
…
“Overall, residential real estate and housing is in good shape”
…
https://www.yahoo.com/news/increase-u-home-prices-slightly-less-forecast-133055975–business.html
Full steam ahead.
Why do we still build with wood that rots? http://www.aircrete.co.uk/
“‘It’s the credit box. There are a lot of people that cannot qualify because they don’t have the credit or the equity,’
Or the down payment.
I’m sure they’re itching to crank up the NINJA’s again.
Sad panda found - literally! http://orangecounty.craigslist.org/reb/5736122425.html
Good lord. They even show Sad Panda sitting on the throne.
When you gotta go, you gotta go.
The number of mortgages being approved by banks and building societies is at its lowest for a year and a half, according to Bank of England figures.
During July - the first full month after the Brexit vote - 60,912 new mortgages were approved.
That was down from 64,152 approvals in June, and was the lowest total since January 2015.
The total amount lent out for house purchases was £10.4bn, down from £11.1bn in June.
The figures also show a 12.4% drop in the number of mortgage approvals on the same month a year ago.
The number of approvals has been falling steadily since March, when there was a rush to buy ahead of tax changes.
http://www.bbc.co.uk/news/business-37219803
Why does Colin Kaepernick think Trump is openly racist?
“You have Hillary who has called black teens or black kids super predators, you have Donald Trump who’s openly racist. We have a presidential candidate who has deleted emails and done things illegally and is a presidential candidate. That doesn’t make sense to me because if that was any other person you’d be in prison. So, what is this country really standing for?”
He reads/listens to corp media?
And the corporate media reports the facts.
Tell Jesus what he’s won Mighty.
“Why does Colin Kaepernick think Trump is openly racist?”
Mulatto Conspiracy Theory
Since Judicial Watch is demanding the answers that the lapdog media should be asking about Hillary Clinton’s influence-peddling and pay-to-play rackets - but never will - I sent them a check for $100 today. With the capture and co-option of virtually all of our institutions by the Oligopoly, it is more important than ever to support groups like Judicial Watch that are seeking truth and justice.
http://www.judicialwatch.org/press-room/press-releases/judicial-watch-submits-email-questions-hillary-clinton-written-answers-oath-due-september-29/
Facebook just got even creepier.
http://libertyblitzkrieg.com/2016/08/30/facebook-just-got-a-whole-lot-creepier/
Buying an overpriced house in any urban jungle run by corrupt, incompetent Democrat administrations seems like an unsound “investment” to me.
http://www.breitbart.com/big-government/2016/08/30/august-rings-out-as-chicagos-most-violent-month-in-two-decades/
The Comrades of Proven Worth must occasionally remind their corporate media lapdogs not to publish any news that challenges The Narrative or reflects poorly on inept Democrat administrations and their manifold failures.
http://www.breitbart.com/video/2016/08/30/john-kerry-the-media-would-do-us-all-a-service-if-they-didnt-cover-terrorism-quite-as-much/
While 95% of ‘Muricans voted for the crony capitalist status quo in 2008 and 2012, Europeans fed up with same are mounting a populist resistance against policies designed solely to enrich the .1% at the expense of everyone else.
http://www.telegraph.co.uk/business/2016/08/30/ttip-trade-pact-near-failure-as-france-demands-total-halt-to-us/
AirB&B: bane of the hotel industry and long-term renters. I see a special tax coming.
http://www.independent.co.uk/news/world/americas/airbnb-los-angeles-landlords-incentivized-caps-inside-airbnb-report-a7217326.html
Chicago is on the cutting edge of Orwellian surveillance of its citizens. The Comrades of Proven Worth (D) will always want to track, monitor, and control every sentient being on their neoliberal plantations.
http://www.chicagotribune.com/bluesky/originals/ct-array-of-things-sensors-installation-bsi-20160829-story.html
Judicial Watch does the work that the lapdog media and co-opted judiciary will never do to get to the bottom of Crooked Hillary’s influence-peddling.
http://www.zerohedge.com/news/2016-08-30/hillary-has-until-september-29-respond-under-oath-these-25-questions-judicial-watch
China’s central planners are as nervous as a six-year-old at the Neverland Ranch.
http://wolfstreet.com/2016/08/30/what-rail-freight-volume-just-said-about-china/
Yellen the Felon and her flying monkeys are laying the groundwork for a dramatic escalation of the Fed’s War on Savers: NIRP.
http://www.zerohedge.com/news/2016-08-30/stanley-fischers-bizarre-justification-negative-rates
MOAR EQUITIES!
From a war the MSM has consigned to the memory hole. Did Saudi Arabia’s huge contributions to the Clinton Foundation include a demand that the lapdog media maintain a blackout on the conflict between Saudi Arabia and the Houthis of Yemen?
http://oilprice.com/Energy/Energy-General/Yemeni-Rebels-Claim-Unconfirmed-Second-Strike-On-Saudi-Aramco-Oil-Facilities.html
Time to really consider Jill or Gary. As Trump says, what do we have to lose?
Ward, I’m very worried about the Beaver.
nice work
Gary only wants a 23% sales tax and to get rid of the IRS. sure, that will be great for the economy. (yard sale economy)
we need at least a 3-5% national sales tax that way everyone even drug dealers hookers bookies will pay something to our country, when they spend their ill gotten gains.
How do Trump supporters feel about aligning their interests with those of China and Russia?
…
That 35 percent is in the United States, of course. In Mexico, Trump’s a lot less popular. A June survey showed Trump at 75 percent unfavorability in the country — compared with Hillary Clinton’s 6 percent. When Ipsos asked people around the world in June who they’d pick in the American presidential contest, no country saw a wider gap than Mexico. Mexico preferred Clinton to Trump by an 88-to-1 margin — an 87-point spread. (The only countries that preferred Trump were China and Russia.)
…
The Comrades of Proven Worth (D) and their oligarch moneybags must complete their capture of the judiciary if they are to have a free hand to engage in patronage, graft, and unfettered looting of the productive once the DNC establishes its permanent Democrat Supermajority and imposes a collectivist kleptocracy. Forward!
http://www.zerohedge.com/news/2016-08-30/soros-seeks-reshape-american-justice-system-pouring-funds-powerful-district-attorney
couple of sad stories today
notice nyc has lots of buildings with 11 foot ceilings on the 2nd floor which was a mandatory requirement for commercial use.
http://patch.com/new-york/east-village/new-york-central-art-supply-closing-after-111-years
its already hard to find gas on the east side in an emergency
http://patch.com/new-york/east-village/last-gas-station-east-village-began-demolition-tuesday